Emerging market in pharmaceutical industry 2018:
Emerging global markets have long been regarded as the “promised land” of the pharmaceutical industry. They represent an exceptional opportunity for the pharmaceutical industry and it is anticipated that they will play a vital role in sustainable great in the industry. Economists define emerging markets as decoupling prosperous countries in which investments is expected to result in higher income despite high risks.
Jim o’ Neil, retired Chairman of an asset management at Goldman Sachs, identified leading economies of emerging markets: Brazil, Russia, India and China (BRIC) and later Brazil, Russia, India, China and South Africa (BRICS) and then Mexico, Indonesia, South Korea and turkey (MIST).
Sales of the pharmaceutical markets in BRICS and MIST countries double in five years, reaching a market share of approximately 20%. The shift towards these new markets has been attributed to the lathe population, growing prosperity and increasing life expectancy in BRICS and MIST countries.
The traditionally lucrative western pharma markets are becoming challenging from a grow perspective, with governments exerting downwards pressures on health care costs.
FOCUS AREAS IN EMERGING MARKETS
In considering market selection on the basis of therapy areas, delegates were clear that communicable diseases will remind a major focus area in emerging markets and form a core revenue stream. Strategic investments, however, will be more inclined towards chronic diseases.
Communicable diseases such as tuberculosis, HIV, malaria and hepatitis are highly prevalent in most emerging markets, hence the focus well be to ensure patient access to the necessary medicines. The same set of markets however, is now facing rapid growth of western chronic diseases such as diabetes, hypertension, cancer and allergies. In India, the prevalence of diabetes and cancer is projected to rise by 25-40% in the next term years. This shift gives pharma companies the opportunity to market their global products in emerging markets, backed by tested go to market strategies and operating models.
CONQUERING EMERGING MARKETS WITH NEW STRATEGIES
Conquering emerging markets can be challenging for industries. These challenges can be grouped into 3 categories
- Infrastructure development: Some countries currently do not have well- developed health care infrastructures and thus focus on improving access to healthcare for the general population.
- Cost containers: Many countries put in place containment measures to manage the costs of their evolving healthcare systems. As a sequence of this program, the cost of some products is expected to fall by 30 percent.
- Value maximizers: Analogous to mature markets, some emerging markets are already moving toward value- driven drug evaluation.
INNOVATION IN EMERGING MARKETS
Innovation and technology will be important differentiators for companies trying to drive sustained growth in emerging markets. The innovation focus and process will be determined by the overall objective of the organization, whether it is aligned with market needs and backed by inputs from patients or other stakeholders such as governments, physicians, or insurance companies.
Investment in innovation was deemed necessary for growth in markets like India, which has 80% generic-drug penetration, multiple iterations of the same drug, and a dwindling pipeline of new drugs. Upgrades to therapies using innovation or technology were seen as drivers to improve access to healthcare and patient adherence.
TECHNOLOGY AS ENABLER
Technology is affecting all areas of life, and the pharma business is no exception. Companies are turning to technology to help address challenges in various therapies—whether it is reducing the pain of an injection or improving the patient’s experience through devices that are simpler to use. Another focus area is the drive to be closer to the patient through connected devices. With chronic diseases becoming more prevalent, there is an increasing need to engage with patients and improve medication adherence.
Emerging markets are vital for sustaining growth for leading pharma organizations. They represent a significant proportion of the world’s population under the control of governments that are seeking better treatment outcomes and improving their healthcare systems. As emerging countries vary so much, a pharma company needs to closely examine its strengths and objectives in relation to the target markets it wishes to enter.